Heavy Construction Equipment Rental in the US Industry Market Research Report Now Available from IBISWorld

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Downstream demand will prove itself to be a strong driver of industry performance in the next five years. The industry will particularly benefit from a revival in demand from the transportation and construction industries. While federal funding for bridge and highway projects has led to an increase in heavy equipment leasing, it is set to die down, threatening overall growth. For these reasons, industry research firm IBISWorld has updated its report on the Heavy Construction Equipment Rental industry.

IBISWorld Market Research

IBISWorld Market Research

Renewed consumer demand for air travel and construction activity will support growth

A range of factors influences the Heavy Construction Equipment Rental industry, from air travel to government funding of roads and bridges. The general trends and activities of downstream industries, such as air, sea and rail transportation; highway, street, tunnel and bridge construction; and oil exploration and drilling all affect the industry's performance. Economic conditions, such as interest rates, unemployment and disposable income, also affect demand. Over the last five years, the economic recession and its impact on the US construction markets particularly hurt demand for heavy construction equipment. IBISWorld estimates revenue will have decreased at an average annual rate of 2.5% to $24.9 billion over the five years to 2012, according to IBISWorld industry analyst Andrea Alegria.

Conditions were grim for rental and leasing businesses from 2008 to 2010. The Heavy Construction Equipment Rental industry was particularly hard hit in 2009, the peak year of the economic recession. Revenue fell 16.6% that year. However, the industry has experienced positive revenue growth starting in 2011, as firms benefited from a cautious business environment in which developers and business owners opted for renting instead of buying equipment as a way to free up capital for other needs. As access to capital remained challenging, builders and developers often turned to rental firms as their only option, especially after financing was denied. Revenue is expected to further grow 6.1% over 2012, Alegria says.

Over the next five years, a return to stronger demand from downstream transportation and construction industries will boost industry performance. Profitability will also improve. After being hit by a significant drop-off in demand and an increase in price competitiveness, average profit margins are forecast to account for about 12.2% of revenue in 2012, down from 13.4% in 2007. As demand for rental equipment stabilizes, profit margins are expected to increase by 2017. Growth in establishment and employment numbers is expected to trail behind revenue as operators consolidate and focus on internal cost savings. The industry has a low level of market share concentration. A vast number of smaller players that operate in geographically dispersed or specialist markets generate the remainder of revenue. Most firms operate one or two rental locations, while larger companies operate on a national level with hundreds of locations across the country. For more information, visit IBISWorld’s Heavy Construction Equipment Rental in the US industry report page.

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IBISWorld industry Report Key Topics

Industry companies are involved in renting or leasing heavy construction, off-highway transportation, mining and forestry machinery and equipment without operators. Companies in this industry may rent or lease products including aircraft, railcars, steamships, tugboats, bulldozers, earthmoving equipment, cranes or well-drilling machinery and equipment.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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